Facts of the case

ICON Health & Fitness, Inc. (ICON) manufactures and sells exercise equipment throughout the United States. In 2000, ICON obtained U.S. Patent No. 6,019,710 (the '710 patent) for a system designed to link parts in elliptical exercise machines. In 2010, ICON filed a complaint against another manufacturer and seller of exercise equipment, Octane Fitness (Octane), and claimed that Octane's elliptical design infringed upon the '710 patent.

The federal district court held that Octane's design did not violate ICON's '710 patent. ICON appealed to the U.S. Court of Appeal for the Federal Circuit. Octane argued that ICON's lawsuit was not based on any real patent infringement, but instead aimed at hampering upstart competitors with expensive, frivolous lawsuits. Therefore, Octane asked the court to apply a patent law attorney fees statute, a statute that awards attorney fees when the plaintiff's suit is found to be "exceptional." The appellate court affirmed the lower court's decision, but found that ICON had not acted "exceptionally" under the statute.

The Federal Circuit has held that a case is exceptional under Section 285 in two limited circumstances.

First, when there has been some material inappropriate litigation related misconduct or second, when the litigation is both brought in subjective bad faith and objectively baseless.

We reject the standard as inconsistent with the statutory text.

The text of Section 285 is inherently flexible.

It imposes only one constraint on the District Court's discretion to award attorney's fees in patent litigation.

The power is reserved for exceptional cases because the Patent Act does not define the term "exceptional," we interpreted in accordance with its ordinary meaning.

The word "exceptional" means uncommon, rare, or not ordinary.

We therefore hold that in exceptional cases simply one that stands out from others with respect to the substantive strength of a party's litigating position or the unreasonable manner in which the litigation was litigated.

District Courts may determine whether a case is exceptional in the case-by-case exercise of their discretion, considering the totality of the circumstances as the opinion explains in greater detail, the Federal standard is -- Federal Circuit standard is overly rigid and impermissibly encumbers a broad statutory grant of discretion to District Courts.

We also reject the Federal Circuit's requirement that patent litigants establish their entitlement to fees under Section 285 by clear and convincing evidence.

Section 285 demands a simple discretionary inquiry.

It imposes no specific evidentiary burden, much less such a high one.

The judgment of the United States Court of Appeals for the Federal Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

This opinion is for unanimous court with the exception of Justice Scalia who does not join footnotes one to three.